A research project aimed at developing the capacity for theoretical characterization of biomolecular interactions and enzymatic reaction mechanisms in solution is proposed. The computational approach centers on computer simulations of biopolymers at the atomic level using Monte Carlo and molecular dynamics techniques. To provide an accurate description of the peptide-peptide and peptide-solvent interactions, a set of polarizable intermolecular potential functions (PIPF) for proteins is being developed. In addition to reproducing the experimental structural and energetic properties of liquids and crystals of model compounds and the results from high level ab initio calculations, the parameterization also takes into account the electrostatic potentials obtained by X-ray diffraction experiment. Furthermore, a combined quantum mechanical and molecular mechanical (QM/MM) potential will be used in Monte Carlo simulations to evaluate the partial charges, induce dipole moments and polarization energies for organic solutes in aqueous solution. These results will be compared with the predictions using the PIPF function. Through the course of parameterization of the PIPF functions, a variety of interesting problems will be studied ranging from hydrophobic interactions to ionic solvation. In addition, a major thrust of our research is to study the structure, specificity and catalytic reaction mechanism of lactate dehydrogenase. Initially, structural features in the active site region and substrate binding specificity will be modeled using statistical perturbation theory and molecular dynamics simulations. This is followed by a full characterization of the reaction profile for the catalytic interconversion of lactate and pyruvate in lactate dehydrogenase in aqueous solution using both the empirical potential function and the latest combined QM/MM approach. In addition t the insight these computations can provide in the understanding of the principles of enzymatic reactivity and function, such a comparative investigation will be valuable for testing current theoretical methodologies and for future development of theory.